SEPT. 11, 2015 • This week, Advanced Micro Devices, Inc. created a separate AMD Radeon Technologies Group for its graphics business. The chipmaker is promoting Raja Koduri to lead the new group as senior vice president and chief architect. Koduri was director of advance technology development at ATI Technologies Inc. when it was acquired by AMD in 2006. He left for Apple Inc. three years later but rejoined AMD in 2013. After the ATI acquisition, AMD chose to take the GPU technology and personnel and combine them with its CPU operations in one Computing and Graphics Group. The rationale for breaking the graphics business back out is to become more agile in the segment.
Impact: When AMD bought ATI in 2006, many hated to see ATI cease to exist as an independent company. As one of the two major graphics hardware leaders, ATI was a major game industry player that was an active and innovative partner at all levels of the business. That changed after AMD bought the GPU maker. There was no lack of great Radeon products released during the intervening years, yet AMD’s ambitions spelled a sea change in how that business operated. AMD had set its sights on developing integrated chipsets that included CPUs and GPUs on the same die. To that end, the firm seeped what had been ATI deeply into every area of AMD’s technology development.
By all accounts the results have been in line with AMD’s larger goals of branching out into new business segments. Yet there was a downside, as well. AMD was not executing deftly enough in core computer gaming graphics, plus new areas such as virtual reality and artificial intelligence. The same could be said for marketing and relations with software developers. Meanwhile graphics competitor Nvidia was not only innovating but branding itself directly to core game consumers. Making graphics its own group answerable only to chief executive Dr. Lisa Su is an attempt to make Radeon products more compelling and to pick up market share that has been lost in recent years. As we have pointed out in our Western Core PC Gamer report, this consumer is progressively driving not only game software but also high-end PC hardware and accessories. In addition, DFC surveys of core gamers have revealed that these consumers are extremely brand aware. So the core game graphics market is expanding and AMD is keen to better serve these consumers.
One other reason for elevating Radeon to its own group is that in some financial circles there is pressure to break AMD apart. It is no secret that fabricators such as AMD have been hard hit with dips in PC shipments in recent years. Some investors would be happy to see AMD’s substantial server business split off into its own company. Similarly, creating the new Radeon group would make it easier to spin off the division later if that course was desired. Su has been open about looking at all options for moving AMD forward so anything is possible, but for now we see this new focus on making the graphics business independent as a major initiative to get aggressive in the segment. We applaud the move as there is plenty of room for an energized Radeon brand to come roaring back.
